TSX Ends At Record High On Strong U.S. Economic Growth -- Canadian Commentary

(RTTNews) - Canadian stocks ended higher for a seventh straight session Wednesday, on some strong earnings and solid U.S. economic growth data, even as the Federal Reserve refrained from hiking rates at the current time. The main index closed at a record high, driven mostly by tech, healthcare, telecom, and financial stocks.

A Commerce Department report on Wednesday showed U.S. gross domestic product for the second quarter rebounded more than anticipated, after reporting a notable contraction in economic activity in the first quarter. U.S. GDP grew 4.0 percent in the second quarter following a revised 2.1 percent decrease in the first quarter, with economists anticipated a 3.0 percent rise.

Meanwhile, employment in the U.S. private sector registered a notable growth in July, albeit below expectations, a report from payroll processor ADP showed Wednesday.

The U.S. Federal Reserve further tapered its quantitative easing plan on Wednesday, noting the U.S. economy has rebounded in the second quarter. As expected, the Fed will reduce its asset purchases by another $10 billion, cutting its monthly asset buying program to $25 billion, in line to wind down its bond buying plan with a $15 billion purchase in October.

The Fed, however, provided little cue as to the timing of any tightening cycle, offering a mixed assessment of the labor market. After a series of positive economic reading, the question still remains as to when the Fed will hike interest rates from historic lows near zero.

The S&P/TSX Composite Index closed Wednesday at 15,524.82, up 78.27 points. The index scaled a intraday high of 15,527.30 and a low of 15,449.03.

On Tuesday, Canadian stocks ended a tad higher, on some mixed data from the U.S. with a bigger than expected improvement in consumer confidence in July, amid lingering concerns over the situation in Ukraine and the Middle East.

U.S. crude oil ended lower after an official weekly oil report from the Energy Information Administration showed U.S. crude stockpiles to have declined more than expected last week, although supplies of gasoline and distillates increased.

The U.S. Energy Information Administration earlier today said U.S. crude oil inventories dropped 3.7 million barrels in the week ended July 25, while analysts anticipated a decline of 2.2 million barrels. The EIA report showed U.S. crude oil inventories at 367.40 million barrels, end last week.

The Energy Index gained 0.47 percent, with U.S. crude oil futures for September delivery dropping $0.70 or 0.7 percent to close at $100.27 a barrel Wednesday on the Nymex.

Among energy stocks, Encana Corp. (ECA.TO) added 0.38 percent, Canadian Natural Resources Ltd. (CNQ.TO) gained 1.24 percent, Suncor Energy Inc. (SU.TO) advanced 1.66 percent, Imperial Oil Limited (IMO.TO) edged up 0.02 percent, and Talisman Energy Inc. (TLM.TO) dropped 0.59 percent.

Penn West Petroleum Ltd. (PWT.TO) plummeted 13.78 percent after revealing a review of its accounting practices for past several years, and will have to restate some of its previous financial reports. Cenovus Energy (CVE.TO) is up 2.44 percent after the company lifted its second quarter profit by over three times.

The Financial Index gained 0.76 percent with Toronto-Dominion Bank up 0.77 percent, National Bank of Canada (NA.TO) up 0.47 percent, Bank of Nova Scotia (BNS.TO) up 0.64 percent, Canadian Imperial Bank Of Commerce (CM.TO) gained 0.70 percent, and Royal Bank of Canada (RY.TO) added 0.98 percent. Nonetheless, Bank of Montreal (BMO.TO) shed 0.66 percent.

The Capped Healthcare Index added 1.61 percent with Valeant Pharmaceuticals International, Inc. (VRX.TO) up 2.41 percent, Catamaran Corp. (CCT.TO) up 2.22 percent, and Extendicare (EXE.TO) up 0.27 percent.

Gold futures ended lower on some upbeat U.S. economic data with the country's gross domestic product rising more than expected in the second quarter.

Global Gold Index slipped 0.27 percent, with gold futures for August delivery shedding $3.4 or 0.3 percent to close at $1,294.90 an ounce on the Nymex Wednesday.

Among gold stocks, Detour Gold Corporation (DGC.TO) plunged 6.39 percent, Goldcorp Inc. (G.TO) shed 1.59 percent, Yamana Gold Inc. (YRI.TO) slipped 0.66 percent, Barrick Gold Corp. (ABX.TO) dropped 0.20 percent, Eldorado Gold Corp. (ELD.TO) shed 0.96 percent, and Kinross Gold Corp. (K.TO) surrendered 0.45 percent.

The Capped Materials Index dropped 0.26 percent on gold mining stocks, with Potash Corp. of Saskatchewan Inc. (POT.TO) edging up 0.05 percent.

The Diversified Metals & Mining Index added 0.77 percent, with First Quantum Minerals Ltd. (FM.TO) gaining 0.97 percent, Lundin Mining Corp. (LUN.TO) down 1.10 percent and Teck Resources Limited (TCK.B.TO) adding 1.33 percent.

The Capped Industrials Index gained 0.79 percent, with Bombardier Inc. (BBD.B.TO) gathering 1.94 percent and Canadian Pacific Railway Ltd.(CP. TO) adding 1.77 percent.

Ballard Power Systems Inc. (BLD.TO) dived 4.62 percent, despite reporting a second-quarter loss that narrowed 14 percent from a year ago.

SNC-Lavalin Group Inc. (SNC.TO) added 2.13 percent, while Ballard Power Systems Inc. (BLD.TO) dived 2.13 percent.

The Capped Telecommunications Index added 0.82 percent, with Telus Corp. (T.TO) gaining 1.89 percent, BCE Inc. (BCE.TO) up 0.20 percent, Manitoba Telecom Services Inc. (MBT.TO) up 0.34 percent, Rogers Communications Inc. (RCI.B.TO) moving up 1.01 percent, and Bell Aliant Inc. (BA.TO) advancing 0.22 percent.

The Information Technology Index jumped 2.26 percent, with BlackBerry Limited (BB.TO) up 2.62 percent, Avigilon Corp. (AVO.TO) gained 3.60 percent, and Open Text Corp. (OTC.TO) gaining 2.73 percent.

CGI Group Inc. (GIB.A.TO) added 0.96 percent, after reporting third-quarter earnings that surged 26.3 percent to C$225.1 million from C$178.2 million a year ago. Earnings per share climbed 26.8 percent to C$0.71 from C$0.56 last year.

In corporate news, Intact Financial Corp. (IFC.TO) gained 2.55 percent after reporting second quarter net earnings of C$215 million, up from C$103 million last year. Earnings per share rose to C$1.60 from C$0.73 a year ago.

Turquoise Hill Resources Ltd. (TRQ.TO) gained 2.11 percent after entering into a share purchase agreement with Hong Kong-based National United Resources Holdings Limited, for the sale of a 29.95 percent stake in SouthGobi Resources Ltd., an integrated coal mining, development and exploration company operating in Mongolia.

TransAlta Corp. (TA.TO) dropped 1.02 percent after reporting a second-quarter net loss of C$50 million or C$0.18 per share, compared to net earnings of C$15 million or C$0.06 per share in the year-ago quarter.

Thomson Reuters Corp. (TRI.TO) added 3.34 percent after having reported adjusted earnings of $0.51 per share for the second quarter, compared to $0.48 in the prior-year period.

Oando Energy Resources Inc. (OER.TO) closed its acquisition of the Nigerian Upstream Oil and Gas Business of ConocoPhillips (COP) for $1.5 billion in cash, after customary adjustments plus a deferred consideration of $33 million. Oando Energy Resources shares ended flat from its previous closing.

In economic news from the U.S., data released by the Commerce Department showed U.S. GDP to have increased by a more than anticipated 4.0 percent in the second quarter following a revised 2.1 percent decrease in the first quarter. Economists had expected GDP to rise by 3.0 percent, compared to the 2.9 percent drop that had been reported for the previous quarter.

Meanwhile, a report from payroll processor ADP showed that employment in the private sector continued to see notable growth in the month of July, increasing by 218,000 jobs, after jumping 281,000 jobs in June. However, it fell short of estimates for an increase of 230,000 jobs.

German inflation slowed slightly in July, with harmonized consumer prices, easing to 0.8 percent, in line with expectations, from 1 percent in June, data from Destatis showed Wednesday. Consumer price inflation eased to 0.8 percent, as expected, from 1 percent in the prior month.

Eurozone economic sentiment rose unexpectedly in July driven by confidence improvements in industrial and construction, survey data revealed Wednesday. The economic confidence index rose marginally to 102.2 in July from 102.1 in June, figures from European Commission showed. Economists had forecast the score to fall to 101.9 from June's originally estimated value of 102.

Meanwhile, China's consumer sentiment increased in July, a survey by MNI and Westpac showed Wednesday. The consumer sentiment index rose to 114.8 in July from 112.6 in June. However, consumer confidence still remained lower than the long-term average, the survey showed.

Elsewhere, industrial output in Japan dropped 3.3 percent on month in June, official sources said said on Wednesday, well shy of forecasts for a decline of 1.2 percent following the 0.7 percent increase in May.